Bitcoin appears to have benefited from the failure of a Silicon Valley bank.
The most popular cryptocurrency has gained over 10% in the past day, reaching a new high of almost $26,000. On Tuesday morning, Bitcoin reached $26,500, its highest price in nine months, before falling. According to CoinMarketCap, Ether, the second-leading coin, rose by 6% to $1,747, retracing some of its gains from a seven-month high of $1,773.
Despite numerous attempts this year, Bitcoin had not been able to rise above the $25,000 threshold until Tuesday.
In the wake of the failure of Silicon Valley Bank and the subsequent scramble by regulators to protect depositors’ funds, the cryptocurrency market has risen. Following the bank’s closure by state regulators, proponents of cryptocurrencies such as Bitcoin declared victory over conventional banking systems and emphasized the cryptocurrency’s ability to protect users from the kind of financial insecurity experienced by startups and other depositors.
This is a historic pump.— Stack Hodler (@stackhodler) March 13, 2023
Forget the price. On a day when bank stocks are in free fall, #Bitcoin is offering safe harbor to those fleeing debasement and counterparty risk.
Satoshi's invention is working as intended. pic.twitter.com/9GgNdc3Dtg
Traders’ expectations that the Federal Reserve will slow the pace of its rate hikes at its upcoming meeting also contributed to the cryptocurrency market’s gains on Tuesday. January’s inflation rate was 6.4%, so the 6% increase was a welcome relief. Before the inflation report and the weekend failures of Silicon Valley Bank and Signature Bank, the general consensus was that the Federal Reserve would raise interest rates by a quarter to a half of a percentage point.
What Crypto Analyst Says:
BitBank crypto analyst Yuya Hasegawa believes that the price of Bitcoin and Ether will continue to rise depending on a few upcoming events.
As noted by Hasegawa, “while the expectation for a pivot in the Fed’s policy has overtaken the investor sentiment, Bitcoin and crypto still have some unresolved agendas,” including a possible tax on mining energy, a lawsuit against KuCoin, and the question of whether or not Ethereum is a security.